Announcing Partnerships from FundersClub -- online venture capital
What is Partnerships
Partnerships enables individual and family office investors to use FundersClub to invest online in the managed funds of top VCs, incubators/accelerators, and professional angel investors. For fund managers and professional startup investors, Partnerships provides an online presence to build a following, turnkey fund management tools to run venture funds, and access to a marketplace of thousands of accredited investors.
Distinguishing points to note
1. Partnerships is focused on professionally-managed funds as opposed to one-off syndicated deals. Although it's still possible for a Partnership manager to syndicate one-off deals with FundersClub, for the first time, Partnerships also allows online access to multi-company venture funds, managed by professional fund managers, that provide built-in diversification and that are aiming for a return.
2. Partnerships is not open to any fund manager. Just as the NYSE has listing requirements, we believe listing requirements are also necessary for an online VC marketplace in order to ensure consistent quality investments. Only those VCs, incubators/accelerators, and professional angel investors who 1) meet FundersClub's minimum standards, 2) pass a committee review process, and 3) abide by a code of conduct for each offered fund are allowed to have a Partnership.
3. Many have critiqued existing deal-by-deal syndicated models for the high logistical overhead for investors and founders and onerous information sharing sometimes endured by participating startups, whether online or offline. The multi-company funds enabled via Partnerships allows VC to come online without requiring startup founders or investors to deal with these issues.
Over the past decade, many cynics have regarded venture capital as a struggling industry that refuses to change with the times. This is in spite of VC being responsible for the mainstream adoption of such disruptive innovations as online search and the smartphone. On the other side of the fence, still others have written off the role that the Internet and software could play in bringing efficiency to VC, in spite of their transformative impact across other industries.
Meanwhile, a majority has been forming that sees the destiny of VC to be online, an insight we have gained both as the world's first online VC platform, and via our close association with some of the industry's leading VC investors. Our new service, Partnerships, dramatically expands the scope of FundersClub's online marketplace to include managed VC funds. It is not a stretch to imagine that the next great VC firm could emerge online.
Although we have stayed quiet as we worked on this next evolution of the FundersClub platform, it should not necessarily come as a surprise. Since FundersClub's original launch back in July 25, 2012, we have worked tirelessly to bring the model of VC online for all.
In order to become the first online platform in the US to enable investing in startups online under the VC model, we had to create and perfect new technology and clear and navigate complex regulatory barriers. We had to gain the support of traditional VC investors, many of whom we now count as our own shareholders and co-investors. And while the nature of startup investing is that not every company we have backed will succeed, through a maniacal focus on screening and curation as well as helping companies post-investment, we have had the honor of supporting some of the most promising startups in the world. These companies have so far raised >$300M in capital including from the best VCs in the business.
This experience of providing unprecedented investment access to top startups for individual and family office investors has laid the foundation for Partnerships. We have much work ahead of us, but here's to ushering in the new era of online VC!